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Unlocking the World of NFTs: A Beginner's Guide to Understanding and Investing in Non-Fungible Token

Updated: Dec 3, 2023

NFT by ART Invest
NFT. Picture composed by the author using Canva

If you are into cryptocurrency, you must have heard the term NFTs. Even if you don’t know what NFTs are, you must have heard about their increasing popularity. They have been in the market since 2014 but its popularity increased tremendously recently in 2021.

So, what are NFTs and why are they becoming so popular? Here is a beginner’s guide to help you understand the concept of non-fungible tokens.

What are NFTs?

NFT is the abbreviation for Non-Fungible token. To understand it, you need to know the concept of fungibility.

If a currency is fungible, it means you can exchange it with other currencies of similar nature. For example, you can exchange a $5 note for 5 notes of $1. It means, dollar is a fungible currency.

NFT refers to the one of a kind digital collectibles that are stored on blockchain and can be sold or traded. These digital collectibles include images, music, memes, or anything unique. You can also get a digital certificate of ownership for any physical or digital collectible.

How Do NFTs Work?

NFTs are sold through marketplaces specially dedicated to NFTs. The owners display their collectibles on these platforms and buyers purchase them using cryptocurrency.

Artists can create digital assets and sell them to potential buyers. They can decide the price and which cryptocurrency they will accept.

When a buyer purchases an NFT, the certificate of ownership passes to them. Buyers can either trade it further or keep it to themselves.

Connection Between Cryptocurrency and NFT

One of the most common queries about NFTs is “Are both NFT and cryptocurrency the same thing?”

Though there is a lot of similarity between these two, they are not the same.

Cryptocurrency is, in fact, fungible. You can exchange or trade cryptocurrency at equivalency. You can exchange 10 bitcoins with another 10 bitcoins, but you cannot trade an NFT with another NFT.

How to Invest in NFTs?

If you want to invest in NFTs, you must fulfill the following two prerequisites,

● Make an account on any NFT marketplace

● Have a digital wallet with cryptocurrency in it

There are so many NFT projects launching into the market every passing day. Before investing into any project, make sure to do your research and shortlist the options that have the potential for growth.

After doing your research, you can buy the NFT from marketplaces like OpenSea or Rarible by attaching your digital wallet and paying through cryptocurrency.

Bottom Line

Now that you know what NFTs are, you might be looking forward to investing in them.

The popularity of NFTs is growing day by day. Whatever project you are investing in, do thorough research and make sure to get the expert opinion.

Once you have purchased an NFT, you can save it or trade it in the form of digital assets according to your choice.

Remember, the price and market value of NFTs are as volatile as that of cryptocurrency. But that doesn't mean you shouldn’t invest in them. NFTs are here to stay just think twice before investing in any hyped project.


Hope this was useful for you! If so, hit the like button to make me feel good. Please note that the above content is not an investment advise and shall be considered only for informative purpose.

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